Goldman's 25 most oversold stocks with concentration in US:
I like the premise and here's a couple of trade ideas I like:
KMX - Very solid with 15-20% earnings growth and a p/e under 20. My worry here would be the "sub-prime" type bubble in auto loans that's been going on for a while.
You can sell the 2017 $43 puts for $3.20 for a net $39.80 entry and that's 30% off the current price and well below 3-year lows.
M - Yeesh, retail? EPS last Q was down 20% and the stock is down 30%, not low enough for me but I do like M better than most retailers.
WFM - You know I like these guys but have they suffered enough? $31.59 is back to $11.25Bn and the company drops over $600M to the bottom line, so p/e is 18.8, which is still high for a grocery store but EPS for the past 3 years was $446M, $551M and $579M and, as I've noted in the past, they just so happened to expand to Europe at the worst possible time.
Cheap food costs tip the scales for me on this one and sure, I don't like paying 18.8 for a grocery store but I do like paying 12x earnings and that would be $22 and you can sell the 2017 $23 puts for $1.55 to net in at $21.45 (30% off) and we can play that with the $30 ($5.50)/$35 ($3.45) bull call spread at $2.05 to net into the $5 spread for 0.50. Margin on 10 short puts is a negligible $2,300 and I REALLY would like to own $46,000 worth of WFM at $23 so let's do 20 of those in the LTP.
CHK - Are they there yet? I keep saying I can't get a good handle on what the restructured company looks like and it's good that we stayed away as they have gotten killed (but so has ECA, who we did pick up).
